This edition of Dear Airby is based off of Complete Compliance, one of the 10 Steps found in
Master of Vacation Rentals.
“Dear Airby,
I saw the blog article about the new Airbnb program to accelerate cash flow but I’m just plain afraid. How in the world will I keep track of when I got paid versus when I owe my TOT tax? I don’t want to hire an accountant or to spend hours and hours detangling my income numbers to stay compliant and pay my bed taxes on time and the correct amount. I could of course you the bump to my cash flow but just don’t think the calculations and extra paperwork will be worth it.”
– Tapped Out in Myrtle Beach, SC
Dear Tapped,
LOL, I had the same fear – exactly but so excited to flow my cash, I thought, well I’ll figure it out when my next taxes are due. Guess what!?1? It’s simple – no kidding.
Now my taxes are payable to my municipalities in the month after the guest stay. In other words, I tally up all the guest stays for the month previous and pay them before the deadline the following month when they are due. I thought the same, how will I keep the figures straight.
With Airbnb, all you need to do is download the last 5 months of transactions info. Once you do, this sort by 1 property (if you have more that 1 property in different cities) and 2 sort by Start Date. Just tally up all the start dates in say Feb and make sure you pay the appropriate amount for those applicable bookings. Once you start getting advance payments, the partial payments will also appear along with the final after guest check-in payment. It’s that simple.
Get ur cash flow’in!
Prosper,
Airby
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